The Supplement to the Tropical Agriculturist 



it is pointed out in an editorial in the " Folha 

 do Norte," ot the 10th October, that the State 

 Federal Congress is not empowered to legislate 

 in monetary matters for the municipalities, and 

 it, therefore, remains to be seen whether the 

 new law can be made operative throughout the 

 State. In any case the reduction of the muni- 

 cipal duty to this figure seems a petty enough 

 concession when the vast preponderance of the 

 Federal tax is considered. 



There would be little criticism of the recent 

 policy of the Para Government on this side if 

 this were the only measure passed by them. 

 But such is unhappily not the case. 



Graduated Taxes: 18 to 22 Per Cent. 



We have information from Brazil which in- 

 dicates that action has been taken which gravely, 

 compromises the position of the manufacturer, 

 the exporter, and in the long run the pro- 

 ducers. Within a few days an enactment 

 striking at the very roots of the rubber-ex- 

 porting industry as at present established has 

 been passed by the Congress and Senate of 

 the State of Para. 



The terms of the new act empower the Para 

 Government to grant to locally organised 

 syndicates, concerned with the collecting of 

 rubber, a reduction on the export duty on fine 

 and entrefine Para rubber, according to scale. 



The reduction is by no means so large as we were 

 led to anticipate ; if the scheme is ever put into 

 practice the effect will probably be more limited 

 than the exporting syndicates in Para imagine. 



A privileged syndicate has been formed 

 which proposes to negotiate direct with the 

 consumers; it is suggested that they will send 

 representatives to Livorpool and New York who 

 will accept shipments and guarantee their dis- 

 posal at the best rates. The legality of this 

 measure, like that limiting municipal duties, 

 seems, from advices we have privately received, 

 to be doubted in some quarters. On the 

 other hand, a distinguished Brazilian states 

 that it is within the letter, though not the 

 spirit, of the law. 



The new development has naturally aroused 

 a storm of criticism from all quarters. It is 

 pointed out by our contemporary, " Le Bresil," 

 that this combination will affect English, Ger- 

 man, American and French exporting houses 

 who serve as middlemen between the Amazon 

 and its export markets, and who finance the local 

 collectors ; those houses are understood to have 

 protested direct and to have urged their govern- 

 ments to intervene Wo do not believe that the 

 protests of the export houses at Para will have 

 a good effect ; as for government protests, we 

 are advised that they will not be listened to at 

 all, even if lodged. 



First Effects. 



Now let us assume that the approved valori- 

 sation scheme will be given a trial at an early 

 date. What will its first and subsequent effects 

 be ? How will it affect manufacturers and Eas- 

 tern planters? It will be observed that the 

 graduated tax is arranged so that when raw 

 rubber prices are high, the exporters will benefit 

 in a two-fold way : (a) by their extra commission 

 due to the enhanced price of rubber; and (b) 



reduction in export tax. When prices are low, 

 the exporters, depressed by the immense reduc- 

 tion in commissions, will be further affected 

 because, whatever they export, at the low price 

 will be taxed at the maximum rate. 



It is therefore quite obvious that every en- 

 couragement is intended to be given to export 

 large quantities of rubber at times like the pre- 

 sent, when prices are above the average. It is 

 equally clear that following increased production 

 and exportation under the artificial stimulus, 

 stocks in America and Europe will rapidly rise, 

 and very soon bring down the price ; when that 

 time arrives, the supporters of the above scheme 

 presumably hope to curtail exportation until the 

 value of raw rubber is raised to, or above, 3s per 

 lb. It is a courageous speculation, and is, in our 

 opinion, not likely to prove very satisfactory. It 

 is an effort to maintain prices irrespective of 

 genuine demand, and against which campaigns 

 can easily and effectively be organised. 



Limitation of the Scheme. 

 The valorisation scheme, as outlined, has such 

 potent limitations that we are amazed that it 

 should have been so favourably received, ex- 

 cept it was regarded, in the eyes of the syndi- 

 cates and exporting houses in Para, as [an 

 experiment worthy of a trial. In the first case 

 the power of the graduated tax is limited on ac- 

 count of the fact that a total difference in ex- 

 port duty of 4 per cent will only operate when 

 the price of rubber ranges from, approximately, 

 3s to 3s 6d per lb. The proposed differential 

 tax, since it does not offer a further reduction 

 when fine hard Para is about 3s 6d, is of but 

 little value at the present time. If it had been 

 in operation during 1908 it would have had 

 some effect from January to June; but since 

 then, and probably up to the New Year, no 

 change of tax was, or will be, possible : further- 

 more, during January to November, 1907, and 

 the whole of 1906, the tax would have been the 

 same— 18 per cent— owing to fine hard Para 

 during those periods being above 3s 6d per lb. 

 The operations of the tax when prices are at the 

 maximum can be watched complacontly by the 

 •xporters, but when the very opposite condit- 

 ions prevail the scheme, as outlined, will recoil- 

 or. its supporters. 



Another point which appears to have escaped 

 notice is that wild Fara, though at present 

 ruling the market, will soon be in an entirely 

 different position. An attempt to regulate the 

 output in order to raise or control the price of 

 the wild product can, perhaps, be safely made 

 now, but in a very few years plantation sup- 

 plies will be far greater than any difference in 

 supply which the differential tax may effect. 

 Plantation rubber will soon be arriving in 

 large quantities, and will be a far more weighty 

 consideration in causing increase of, or main- 

 taining, stocks than the extra amount ex- 

 ported under the proposed minimum tax from 

 Para. The reduced price of rubber in the 

 future will be very seriously controlled by 

 the large production of Para grades from East- 

 ern plantations, and the value will, in all pro- 

 bability, be brought down to the minimum. If 

 the differential taxes are not altered, the mani- 

 pulators of tbe wild supply will bo embarrassed, 



